Magna Int'l. (A) (MG.TO)

Looked at this a few years ago, but didn’t buy it on concerns of their activity in Europe. Europe is still a struggle. If it corrects a little more, it is probably a good buy.

This is really best of breed for auto parts. Scores very high for him on both price momentum and valuation. It has been perpetually undervalued, and despite the stock moving up over the past couple of years, the valuation is still there. High ROE’s and a reasonable valuation on EBITDA at 6.7 times. No net debt and has a great balance sheet. Has the ability to make accretive acquisitions. Dividend yield of 1.53%.

Strong from Mid October to Mid April. On a technical basis this one has done better than that this year. Technically it is okay, but seasonally it is not positive. However, if it is doing well, then you stick with it.

Many bought in when they got rid of the dual class structure. Why did it make such a difference? It was the removal of the CEO. It was being run for the benefit of one of the classes of shareholders only. A lot of institutional investors felt the same way the guest did.

Good exposure in Europe. 10 times earnings and 6 times cash flow. 22%, 5 year dividend growth rate. Well managed company and more room for them to add content to car manufacturers. Thinks we are in the 5^th inning of the auto cycle.

He still likes this company. The average car in the US is about 12 years old, so certainly there is a product cycle upgrade at some point. Have a very strong balance sheet and have enacted a lot of shareholder friendly actions over the years. Trading at 12X PE forward with a 10% growth rate, which puts it at only a 1.2 PEG ratio, so it is a pretty good stock to own. This is on his radar.

You have 4 choices for auto parts manufacturers in Canada. This has done exceptionally well and still have room to move higher. When you are a global auto parts manufacturer, you may have a slowdown in North America, but a pick up in Europe. He generally likes these names. He is looking at another interesting name called Exco Technologies (XTC-T), which hasn’t moved as much as the other players. It is a smaller player that may be moving up into this company’s range.

They have a relationship with all the car companies. As long as there are more car sales…. Valuation is just as cheap as when he bought it a few years ago. You have to believe that car sales are going to continue.

(Market Call Minute.) Has had a bit of a pullback and you could Buy here. The leverage is obviously on Europe and improving European economic cycle in auto demand.

All the auto parts companies have done particularly well. They are all still selling towards the high end of their range. We have been in a real bull market for automobiles. When you look at what automobile companies can earn in this kind of a market, they are not that out of line. Has a multiple of 12-12.5 times earnings. At this point in the cycle, you are probably buying closer to the top than you are to the bottom. 1.5% dividend yield.

(A Top Pick April 16/15. Up 9.07%.) Likes what is going on with the economic recovery and what that means for the consumer. Certainly the auto sector will benefit from this, so it comes down to how you would like to play the space. A lower risk way to get that exposure is through Magna, given that they are selling to pretty much everybody. Also, commodity prices have come down, steel in particular. He is continuing to buy this and sees huge upside.

Chart shows a strong upward trend from 2012. Generally not a very volatile stock. Based on his overall market view, you may see a correction in the next little while, but maybe not. A fabulous chart. Doesn’t think you will be disappointed owning this in the long run.

He likes the space. You get exposed to economies outside of Canada. He has MG-T and LNR-T and they are big positions. As the economy gets better then auto sales get better. MG-T is a great global player. They do a really good job of adding content with their manufacturers. The wild card is that they are in the assembly business. If Apple got into the car business then MG-T would really have some upside. He also really likes LNR-T. He would own both.

Has held this stock for about 5 years. Trades at 10X 2016 earnings. Dividend yield of 1.5%. One of the best balance sheets you will find in the world. They have less than half times debt to cash flow and almost 6% free cash flow yield. He has a target of $94 on this.

Had owned this, but sold it just because he had done so well on it. Had kept Martinrea (MRE-T).